US suspends duty-free status of Rwandan apparel under AGOA

US President Donald Trump recently issued a proclamation suspending application of duty-free treatment for all apparel items from Rwanda under the African Growth and Opportunity Act (AGOA). Rwanda, however, remains eligible for non-apparel benefits under AGOA. “We regret this outcome and hope it is temporary,” said Deputy US Trade Representative (USTR) CJ Mahoney. The Presidential action suspends AGOA benefits for a class of imports that totaled $1.5 mn in 2017, and which accounts for nearly 3 per cent of Rwanda’s total exports to the US, according to a report. The action does not affect the vast majority of Rwanda’s exports to the United States. “We look forward to working with Rwanda to resolve this issue so that benefits in the apparel sector may be restored,” Mahoney said.

An AGOA issue relating to new barriers to United States trade and investment first arose in 2015 when the East African Community (EAC) established a plan to ban imports of used clothing and footwear. The USTR’s engagement on this issue intensified in 2016 when the EAC announced it would phase in the ban by 2019. Thereafter, three EAC AGOA beneficiaries—Kenya, Tanzania, and Uganda—worked with the United States and took actions to revise their policies. As a result, they continue to receive full benefits under AGOA. Rwanda, however, insisted on continuing with a policy that has raised tariffs on imports of used apparel and footwear by more than 1,000 per cent, effectively banning imports of these products. President Trump believes suspension of AGOA’s benefits, instead of termination of Rwanda’s status as an AGOA beneficiary, is the appropriate remedy in this instance, the USTR added.